August 23, 2013. Retrieved online August 26, 2013 from Alta LeCompte, Las Cruces Bulletin
National economy to outperform New Mexico
[Excerpts below reprinted with permission: Read the complete Las Cruces Bulletin article]
New Mexico State University economics professor Jim Peach has circled Tuesday, Sept. 17 on his calendar.
If nobody over reacts when the Federal Reserve on September 17 takes the expected first step to slow its bond-buying pace, there’s a good chance the economy will continue to grow, albeit slowly, Peach forecast Tuesday, Aug. 20.
He was one of three local experts participating in the KRWG-Greater Las Cruces Chamber of Commerce Economic Update Forum taped at the KRWG TV studio.
Peach shared the stage with fellow NMSU professors Chris Erickson, who gave a less optimistic outlook for the state and local economy, and Ken Martin, who forecast continued strength in U.S. financial markets.
“I think, when the revised gross domestic product figures come out, they will be at 1.9 percent or 2 percent, and will be something above 2 percent for the rest of the year,” Peach said.
“The elephant in the room, if you like, is the federal budget battle,” he said.
Peach predicted Congress will avert disaster on the budget as well as the debt ceiling, which also is coming up for a vote. He said he expects “a lot of smoke, yelling and screaming” but ultimately action on the debt ceiling.
He said he also is concerned about developments in Egypt.
Local economy still stuck
Erickson said the Las Cruces economy is generating jobs at a rate of six-tenths of one percent a month.
“That’s such a low number, as an economist I’m going to call it zero,” he said.
“Sequestration is what’s making it so difficult for us to gain jobs.”
Although he didn’t have Las Cruces figures, he said New Mexico ranks fourth from the bottom in fourth-grade reading and eighth grade math.
“That’s the thing that keeps businesses from moving into the area,” he said.
Markets ride high
Martin looked to continued strength in financial markets.
He shared some gloomy headlines from August 2012 that foretold market jitters or worse, and then produced headlines bearing the same message in August 2013.
Martin said he’s not overly worried by August 2013 headlines such as “Signs of a market correction ahead.”
Audience weighs in
During a question-and-answer session, the economists debunked some of the worst-case scenarios circulating about the economy.
Peach disagreed with a claim that part-time jobs are growing faster than full-time jobs.
“The data don’t support that,” he said.
He said the growth of full-time jobs is “just below the rate of growth for full-time jobs.
Responding to a question from moderator Fred Martino about the possibility New Mexico’s gross receipts tax is a disincentive to businesses locating in the state, Erickson said the GRT is problematic because it’s unique to New Mexico “It’s awfully hard to explain GRT to outsiders,” he said.
He also sought to allay fears about the Affordable Care Act.